China rolls out measures to maintain sustainable growth in 2019

The year 2018 was hard for China – its economic growth slowed, and the external environment became complicated and challenging, causing new downward pressure in its development. To address these difficulties, China will seek new strategies to balance the need to stimulate a weakening economy with the need to cut debt and reduce financial risk.

At the same time, China aims to promote all-round opening-up, and foster new strengths in international competition. The year 2019 is crucial for China. Opportunities and challenges coexist as China rolls out measures to maintain sustainable growth in 2019

Two or three years ago, the primary economic driver was supply-side structural reform, which dealt with overcapacity and deleveraging. However, over the last year, there has been concern that the slowdown of the Chinese economy has been exacerbated because deleveraging had been too aggressive or too fast.

The government is trying to find a balance. With deleveraging having reached its goal, especially in the state-owned sector, government policies will shift to stabilizing leverage, giving room for fiscal policies, such as reducing taxes and fees, which will be a new driver of growth in China.

The Second Session of the 13th National People's Congress held a press conference where He Lifeng, director of the National Development and Reform Commission, answered questions on issues related to “promoting high-quality economic development”, March 6, 2019, /VCG·Photo

This year, China pledges to deepen reforms, among which the most important is to create level playing fields for all types of enterprises. Also, because the older financial system can no longer support new economic activities that center around innovation, financial reform will be important.

First, a multi-layer capital markets system should be built, which means more direct financial capacities. Second, market forces should play a decisive role in allocating and pricing financial products and services, with the government reducing its intervention. Finally, the government should reform the financial regulatory system to contain systemic financial risk.

Currently, China actively engages in economic globalization and free trade, and endeavors to optimize its outbound investments and international cooperation. To realize high-quality development, China is committed to improving liberalization and facilitation of trade and investment, which means more foreign investment will be attracted by effective measures, like relaxing controls over market access and shortening the negative list for global investors.

Moreover, the Belt and Road Initiative, which has been incorporated into China's Constitution, will continue to be pursued under the principle of achieving shared growth through consultation and collaboration.

(CGTN)